ADP report shows 158K private-sector jobs added

posted at 9:21 am on November 1, 2012 by Ed Morrissey

ADP’s brand-new paradigm for predicting job growth in the private sector got off to a somewhat rocky start this morning; their site crashed after the release for a brief period. Their new report, using Moody Analytics, is intended to close the running gap between their projections and the BLS report from the Establishment Survey. Today’s report with the new processes predicts that the US economy added 158,000 jobs in October, above analyst projections but still not a robust rate of growth:

Private sector employment increased by 158,000 jobs from September to October, according to the October ADP National Employment Report®, which is produced by Automatic Data Processing, Inc. (ADP®), a leading provider of human capital management solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.

Generally speaking, the economy has to add 125,000 jobs each month just to keep up with population growth. This would make October a slightly positive month — if the new processes from Moody Analytics has corrected the chronic overshoot at ADP. Normally, I’d take 60% of the ADP figure and project the BLS number from that. Under that plan, I’d guess that we’re looking at somewhere around 100,000 jobs added in tomorrow’s official report, which would be slightly under the minimum growth necessary.

In the week ending October 27, the advance figure for seasonally adjusted initial claims was 363,000, a decrease of 9,000 from the previous week’s revised figure of 372,000. The 4-week moving average was 367,250, a decrease of 1,500 from the previous week’s revised average of 368,750.

The advance seasonally adjusted insured unemployment rate was 2.5 percent for the week ending October 20, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending October 20 was 3,263,000, an increase of 4,000 from the preceding week’s revised level of 3,259,000. The 4-week moving average was 3,266,500, a decrease of 6,250 from the preceding week’s revised average of 3,272,750.

The decline in this case isn’t statistically significant. We have operated in a range from 360K-380K since the spring of 2011. The four-week average still lands squarely in that range, as does this week’s level, even without the now-obligatory upward adjustment the next week. While this data isn’t a direct correlation to job growth, as a series it does correlate, at least indirectly, to the health of job creation in the economy. That health hasn’t changed much over the last 18 months.

The private sector created a better-than-expected 158,000 jobs in October, while jobless claims edged lower and productivity rose about as much as expected.

A day after the firm sharply lowered its original count for September, ADP and Macroeconomic Advisors, working now with Moody’s Analytics, said the service sector once again had a big month for job creation.

Services comprised most of the October total, ringing up 144,000 jobs while the goods-producing sector made up the balance at 14,000.

They also note that ADP still hasn’t quite fine-tuned its changes:

The ADP changeover in the way it was handling its monthly job count created a stir Wednesday when the firm said the original 162,000 new positions reported for September actually came down to 88,200 under the new methodology. …

That number was changed again Thursday, revised mildly upward to 114,000, close to the government’s number for the same month.

What does this mean for tomorrow’s BLS report? I would expect the Establishment Survey to report something close to September’s level of job growth, perhaps as high as 120,000 new jobs. However, I would also expect that outlier from the Household Survey last month to correct itself in this report, which would push the jobless rate higher. I’ll guess 8.0% for that part of tomorrow’s report.

What do you think tomorrow’s jobs-added number will be? Take the poll:

I would also expect that outlier from the Household Survey last month to correct itself in this report, which would push the jobless rate higher. I’ll guess 8.0% for that part of tomorrow’s report.

That’s what would happen under normal circumstances, but there’s no way Obama will allow the rate to go back to 8% just 4 days before the election. He’ll have the Labor Dept find a way to keep it at 7.9% or lower.

It’s entertaining to parse these numbers and to predict how they will play politically, but I truly think the days of having any real faith in these numbers is gone. Ask yourself why we don’t calculate the unemployment numbers as we did in 1980. If we did, the rate would be near 11.5%. The goal is not to be accurate; it’s merely a tool to shape public opinion and to obfuscate the waves of crushing reality as they near the shore.

– +80K non-farm jobs/+100K private-sector jobs
– 7.6% U-3 as more Heroes of the Election stopped looking for work

Of note, Gallup’s mid-month unemployment survey had a seconally-adjusted (assuming last year’s adjustment is still valid) U-3 of 7.7%, and a comparison between last year’s mid-October regular state unemployment claims and this year’s suggests a U-3 of 7.8%.

romney is still trying to take a knife from his back and now this?! Obama seems set to win the end game of the election. RCP average is equalized and swing states turned a little more blue.
I not sure what can romney do to turn this around in 5 days…

I would also expect that outlier from the Household Survey last month to correct itself in this report, which would push the jobless rate higher. I’ll guess 8.0% for that part of tomorrow’s report.

That’s what would happen under normal circumstances, but there’s no way Obama will allow the rate to go back to 8% just 4 days before the election. He’ll have the Labor Dept find a way to keep it at 7.9% or lower.

I expect 3 million “part-time jobs” created in the Household Survey. This is based upon working only 1 hour a week (in otherwords, mowing your neighbor’s lawn) is considered a “job” in the Obama economy.

Any chance there is under-reporting on new jobless claims due to Sandy? (I recall the effect of . . . well, nothing other than incompetence in reporting from all of CA I guess. . .on the jobless claim number two weeks ago)

I expect 3 million “part-time jobs” created in the Household Survey. This is based upon working only 1 hour a week (in otherwords, mowing your neighbor’sOWN lawn) is considered a “job” in the Obama economy.

The dap number means nothing it never did. Economists ignore this number and the number they show is never accurate.

The labor dept with the Obama donates to his campaign will make it 7.5 to 7.4. No matter what the job number really is. They will also discard anyone not in the workforce, all 28 million of them. We are pilgrims in an unholy land, land of which tactics being used, that were used under the Nazi regime, and a press just as bad.

The number will not matter, people made up their mind, so did independents. Rest assured

It doesn’t matter at this point, decisions have been made and everything points to a Romney victory. People vote with their pocketbooks and what they see going on around them, so no matter how much you cook the books at this point it is irrelevant.

Purely anecdotal, but I had three meetings this week with three different customers and all of the are optimistic and planning for growth in 2012, but all of them added that it was contingent on a Romney victory. I think businesses are anticipating a change and are ready to grow, but if we continue the destructive economic policies of Obama all bets are off.

agreed, the only Undecideds are those who can’t decide if they will bother to go out on Tues and vote…you will see a significant lower D# for Obama on Tues as storm victims in the blue states now have a sufficient reason to stay home, or atop a roof in Hoboken, as the case may be….

Any chance there is under-reporting on new jobless claims due to Sandy? (I recall the effect of . . . well, nothing other than incompetence in reporting from all of CA I guess. . .on the jobless claim number two weeks ago)

johnny alpha on November 1, 2012 at 9:55 AM

Little. I haven’t seen any mention of “oddities” from the 4 states where the capital was close enough to Sandy to be affected.

Not for one second do I believe that we’ll see any kind of number that damages Obama come out tomorrow. After all, he’s now in the process of healing the eastern seaboard with the fabulous job he’s doing (thank you for nothing, Gov. Christie) and he’s finally “acting” presidential – acting being the key word. But apparently “pretending” to be president while not really doing the job is enough for a great number of voters.

The numbers are bogus.
Why do people still believe there is even a hint of honesty coming from this administration?
Remember the CBO and estimates of Obamacare costs? Just change the way of calculating the numbers. The powers that be changed the definition of “full time” workers to 34? hours. Why?..they can claim that many more “full time” jobs created and it closes the window a bit for employers to sidestep the the Obamacare mandate.
Inflation rate?..eliminate fixed costs for everyone by not counting food, energy etc. Why?..it makes their policies look better and programs like SS etc that are tied to inflation increases see lower adjustments to their checks, leaving more money in the government pot to spend on turtle tunnels and salary and benefit increases for themselves.

Good Grief, did you even read the blog post. Why quote an article with outdated numbers? That number was revised back up to over 110,000 today.

gumbyandpokey on November 1, 2012 at 9:34 AM

Your President promised 5% unemployment with his ‘stimulus’ – Bush-level numbers. Also a halved deficit.

You dolts complained about unemployment levels of 5.5% during the Bush years, calling them too high and repeating the phrase : the worst economy since the Great Depression” throughout the 2004 campaign.

Any reason why you’re arguing the exact opposite with crappier numbers now besides the fact that you’re a partisan hack who isn’t even aware of what he was saying when the shoe was on the other foot?

There are still people out there who voted for Obama in 2008, who know in their hearts that he’s screwed up the past four years but who don’t want to admit they are the ones who made a mistake by falling for his hoo-doo BS when they voted for him back then. So any little move towards re-justifying their badly misplaced faith in him in 2008 may be enough to get them to vote for him again. That way, they don’t have to feel like suckers — “See! See! I knew he was presidential!!! Look at him handle the hurricane! Watch him create non-existent jobs! Hear him say he will leave ‘no American behind!’ Golly gee – he can be my guy again!!!! Oh, and I can also reaffirm my lack of racism. Wheeeee!!!!”

The only problem with that — and it’s a whopper — is that Obama remains as unqualified, incompetent, arrogant, clueless and corrupt as ever and all of that will only be magnified in his second term.

..it’s simple really. The more absurd the job numbers/book cooking the more in panic mode the Crapsack campaign is. If we get another Neutron Jack tweet, Romney will run the table.

But the bottom line is that the bad economy is baked in the cake and those of us who fear for our jobs and/or those of us who are out of work/unemployed –all 23 million of us –know who we are and know who is largely responsible.

We all got our old football kneepads and are prepared to crawl across broken glass to dump this pole of shitt. Me? I am putting on my gasoline suit now and will appear at the gates of Hell on 6 November
— ready to rumble.

There’s little time left in the 2012 presidential campaign for a momentum-shifting “game changer.” But tomorrow’s job report might be just such an event. The major — and somewhat mysterious — drop in the unemployment rate last month, to 7.8% from 8.1%, gave a much-needed political boost to the Obama campaign. On the surface, it showed a labor market suddenly gaining Wolverinesque healing abilities. It also stripped GOPers of great talking point.

But what if the data tomorrow show the September number to be an anomaly? It could happen, says Stephen Oliner, an AEI economist and former Federal Reserve senior adviser:

Payroll employment likely continued to grow slowly in October, posting a gain of about 125,000. In the separate survey of households, I expect the puzzling surge in employment that was reported last month to be followed by a decline in October. Similarly, I anticipate that the unemployment rate will move back up to 8 percent after the surprising drop in September. Overall, the report will portray a labor market that remains weak.

This report was debunked – the ACTUAL numbers before ADP’s rejiggering (to help The One) show 365,000 jobs LOST from what was expected for 2012.

A week ago, ADP announced that going forward it would coordinate with Moody’s (yes, that Moody’s), and especially its chief economist, SecTres hopeful (InTrade odds of actually attain that post: 0.00) Mark Zandi, to fudge adjust its data going forward. The data revision was supposed to be publicly disclosed tomorrow when the official October ADP number was released. Well, just like today’s Chicago PMI, and so many other data points recently, this too was released early. What the early release allowed us to promptly calculate is that using the historically revised numbers, and comparing those based on the original methodology, in 2012 alone, the US would have lost a whopping… 365,000 private jobs! Putting thus number in context, according to the revised methodology, the US has generated only 1.172MM jobs in 2012 through September, or in other words, a statistical “fix” magically eliminated over 30% of what the market had previously expected were job gains, a number which the incumbent president has certain taken advantage of on more than one occasions while campaigning.

Whatever the number ultimately is, there’s no way in hell it will be an increase. If it were, the number wouldn’t come out tomorrow due to Hurricane Sandy. The fix is in, and that fix will be good to Obama, make no mistake about it.